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Hong Kong Financial Secretary Paul Chan says global rate rises, recession will hurt exports, but consumption vouchers will offset impact
- City’s exports will ‘naturally be affected’, as interest rates rise in developed economies and the external economic situation continues to worsen, Chan says
- Central banks will continue to sharply raise rates globally over the next three months with inflation lingering, former Bank of England governor says
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Interest rate increases in the United States and other major markets globally will have an impact on Hong Kong’s economy and exports, Financial Secretary Paul Chan Mo-po said on Thursday. But the second phase of the city’s Consumption Voucher Scheme will help offset this impact.
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“With the increasing interest rates in the US, as well as many of the developed economies, the external economic situation will continue to worsen. So the export performance of Hong Kong will naturally be affected,” Chan said during a media briefing after the Hong Kong Monetary Authority (HKMA) increased its base rate by 75 basis points in step with an overnight US rate rise of the same margin.
“But on the other hand, if the Covid-19 situation is largely under control, private consumption, with the launch of the second phase of the consumption vouchers, will have increased momentum in the second half of this year,” he added.
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Millions of Hong Kong residents will receive HK$5,000 (US$637) per person as part of the Consumption Voucher Scheme on August 7.
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